Hon’ble Jodhpur ITAT has in the case of ITO V/s Shri Bhuvanesh Maheshwari has held that Omission of notice u/s 143(2) of the Act is not merely a procedural irregularity and it is not curable.
Facts of the case in brief are that the assessee filed his return of income belatedly on 26/03/2010 showing taxable income of Rs. 6,03,414/-, which was processed under section 143(1) of the I.T. Act, 1961 (hereinafter referred to as Act, for short on 05/04/2010. Since, it was survey case, so it was selected for scrutiny. The Assessing Officer observed that notice under section 143(2) of the Act was issued to the assessee on 23/09/2010 and thereafter also, other notices were issued under section 143(2) of the Act. The assessee stated that the notice under section 143(2) of the Act dated 23/09/2010 has not been received by him. The Assessing Officer, however, framed the assessment by invoking the provisions of section 144 of the Act by observing that the assessee for the reasons best known to him, had not complied with the terms of the notices. Ultimately, the assessment was framed at an income of Rs. 42,38,457/- by making the various additions.
As per the Assessing Officer, the notice under section 143(2) of the Act was served on the assessee on 24/09/2010 through Notice Server and the said notice was received on behalf of the assessee by one Shri Bherulal.The assessee furnished an affidavit of Shri Bherulal to whom notice was claimed to have been served. In the said affidavit, Shri Bherulal stated on oath that he was served no notice of the assessee in the question by the department.The Hon’ble ITAT observed that The notice under section 143(2) of the Act in this case was to be served on the assessee before 30/09/2010 whereas notice dated 07/10/2010 was received by the assessee first time on 11/10/2010 i.e. after the statutory time limit prescribed under section 143(2) of the Act for service of notice. On a similar issue, the Hon’ble Apex Court in the case of ACIT & another Vs. Hotel Blue Moon (2010) 321 ITR 362 has held as under:-
“Section 158BC provides for enquiry and assessment. After the return is filed, clause (b) of section 158BC provides that the Assessing Officer shall proceed to determine the undisclosed income of the block period in the manner laid down in section 158BB and “the provisions of section 142, sub-sections (2) and (3) of section 143, section 144 and section145 shall, so far as may be, apply”. This indicates that this clause enables the Assessing Officer, after the return is filed, to complete the assessment under section 143(2) by following the procedure like issue of notice under section 143(2)/142. This does not provide accepting the return as provided under section 143(3) only. If an assessment is to be completed under section 143(3) read with section 158BC, notice under section 143(2) should be issued within one year from the date of filing of the block return. Omission on the part of the assessing authority to issue notice under section 143(2) cannot be a procedural irregularity and is not curable. Therefore, the requirement of notice under section 143(2) cannot be dispensed with.”
From the ratio laid down in the aforesaid referred to case, it is crystal clear that the omission on the part of assessing authority to issue notice under section 143(2) of the Act cannot be procedural irregularity and is not curable. Therefore, requirement of notice under section 143(2) of the Act cannot be dispensed with. In the present case, since the Assessing Officer failed to serve the notice under section 143(2) of the Act to the assessee within the stipulated time limit prescribed, therefore, learned CIT(A) rightly quashed the assessment framed by the Assessing Officer on the basis of invalid notice under section 143(2) of the Act.